A summary of Shariah principles on employee and contractor liability

Every Saturday evening, I lecture on Fiqh al-Mu'amalat, Islamic Finance, banking and economics using the Ottoman text Majallah al-Ahkam as a navigation to guide the discourse. Last week, we discussed the Islamic law of tort and in particular, the liability of employees and contractors from a Shariah compliance perspective. To summarise, the key takeaways of the lesson were the following:

1. Whenever you are granted possession of something by consent, you are regarded as an "Ameen" (fiduciary) and in a state of Amanah, you owe a duty of care.
2. Anyone who has a fiduciary duty is not liable for any loss to an asset or property when there is no negligence, transgression, causation or breach of contract from their side.
3. Islamic law of tort is generally based on the "fault" principle. A defendant is liable for damages when he acts intentionally or negligently and his actions result in harm or damage. Islamic law identifies four performances which make a person liable.

• Breach of contract - going against the express or inferred terms of a contract results in breach and generally results in liability.
• Proximate cause - being directly involved in the consequences of any harm.
• Transgression - To do any act which is beyond reasonable, beyond the norm and beyond your remit.
• Negligence - This refers to failing in the standard duty of care any reasonable person should offer in that position.

4. By doing any of the above four, an employee or contractor will be in a state of 'Dhaman' (liability). However, he will only have to pay damages or compensation if actual harm is incurred.